How to Be Commercial Loan Processor - Job Description, Skills, and Interview Questions

Feb 4, 2020 / 5 Minutes Read / By Albert

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The lack of an efficient loan processor is a common cause of delays in completing commercial loans. This can be especially problematic for businesses looking to obtain a loan quickly to meet operational needs. The inability to process loans in a timely manner can lead to missed opportunities, increased costs, and decreased customer satisfaction.

To ensure a successful commercial loan process, it is important for lenders to have a highly trained, experienced loan processor and a streamlined system in place to process loans quickly and accurately. By investing in an efficient loan processing system, lenders can reduce the amount of time required to complete loans and ensure that businesses receive the funds they need in a timely manner.

Steps How to Become

Obtain a high school diploma or equivalent. Many employers prefer to hire commercial loan processors who have at least a high school diploma or GED. Taking business classes in high school may also be beneficial.
Take college courses in finance or business administration. Courses in finance, accounting, and business administration can help prepare an applicant for the job of commercial loan processor. Many employers prefer candidates with at least a two-year degree, although some may accept applicants with only a high school diploma.
Gain experience in the financial sector. Most employers require commercial loan processors to have some experience in the financial industry. Applicants may gain experience by working in a bank, credit union, or other financial institution.
Apply and secure a job as a commercial loan processor. After gaining the required education and experience, applicants are ready to search for a position as a commercial loan processor.
Complete on-the-job training. After being hired, most employers provide additional training to new commercial loan processors, which typically lasts for several weeks.
Get certified as a Loan Processor. Professional certifications are not required for all positions, but they may help applicants stand out from the competition. There are several certifications available, including Certified Loan Processor (CLP) and Certified Mortgage Loan Processor (CMLP).

Being a reliable and efficient loan processor is essential for any financial institution. It starts with having a strong understanding of loan regulations, procedures, and protocols. This requires staying up-to-date with the latest industry changes and having a comprehensive knowledge of the loan application process.

it's important to have excellent communication and interpersonal skills in order to effectively interact with clients and other stakeholders. Furthermore, an organized and methodical approach to managing multiple loan applications at once is essential for staying on top of deadlines and meeting customer expectations. Finally, leveraging technology such as automated loan processing software can help streamline the process, allowing loan processors to work more efficiently.

By following these steps, loan processors can ensure they are reliable and efficient in their role.

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Job Description

Review and verify loan documents, including credit reports, financial statements, tax returns, title documents, and appraisals.
Prepare loan files for underwriting, including organizing and scanning all documents.
Establish and maintain contact with customers, referring bankers, and other third parties to obtain additional information as needed.
Research and analyze loan applications, collateral, and related documents for accuracy and completeness.
Ensure all loan applications meet the bank's lending requirements and comply with all applicable laws and regulations.
Prepare loan packages for submission to underwriting and processing teams.
Monitor loan progress and ensure timely completion of all documents and tasks.
Review loan files for accuracy and completeness prior to closing.
Follow up with customers to ensure satisfaction with loan process and services.
Assist with other duties such as customer service, problem solving, and addressing customer inquiries as needed.

Skills and Competencies to Have

Knowledge of commercial loan documentation
Ability to analyze financial statements and other documents
Ability to follow up with customers on documentation and data
Knowledge of loan processing systems and software
Excellent customer service and communication skills
Attention to detail
Ability to manage multiple tasks, prioritize workload, and meet deadlines
Knowledge of banking regulations
Ability to identify potential problems and escalate issues
Problem-solving skills
Ability to work with minimal supervision

Having strong analytical and problem solving skills is the most important skill for a commercial loan processor. This is because loan processing requires the ability to analyze financial documents, such as credit reports and tax returns, to assess a borrowers financial status. Loan processors need to identify any issues that could lead to an increased risk of default and determine the best options for the lender.

They must also be able to negotiate terms and conditions with the borrower, and calculate the necessary loan amount and interest rate. strong communication skills are essential in order to provide clear explanations to both the borrower and the lender. By having these skills, commercial loan processors can ensure that all parties involved are satisfied with the outcome of the loan process.

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Frequent Interview Questions

What experience do you have with commercial loan processing?
How do you ensure accuracy and compliance when processing loans?
What strategies do you use to stay organized and manage multiple tasks at once?
What techniques do you use to keep up with changing regulations?
How do you handle challenging customer relationships?
What is your experience with preparing loan documentation?
What strategies do you use to ensure a smooth closing process?
Describe a time when you had to adjust to a new system or process quickly.
How would you prioritize tasks when under a tight deadline?
How do you ensure accurate reporting of loan information?

Common Tools in Industry

Word Processor. Used to create, edit, format, and print documents. (e. g. Microsoft Word)
Database Management System. Software that stores and manages data in an organized way. (e. g. Oracle Database)
Spreadsheet Software. Software used to create and manage spreadsheets. (e. g. Microsoft Excel)
Loan Origination Software. Software that automates the loan origination process. (e. g. Encompass)
Accounting Software. Software used for recording and tracking financial transactions. (e. g. QuickBooks)
Loan Analysis Software. Software used to analyze the financial performance of a loan. (e. g. Veros Credit)
Document Management System. Software used to store, manage, and track documents. (e. g. Adobe Acrobat)
Credit Report Software. Software used to generate credit reports for customers. (e. g. Experian CreditWorks)
Risk Analysis Software. Software used to measure and manage risk associated with loans. (e. g. Moodys Analytics)
Customer Relationship Management (CRM) Software. Software used to manage customer relationships and interactions. (e. g. Salesforce)

Professional Organizations to Know

American Association of Commercial Finance Brokers (AACFB)
Commercial Finance Association (CFA)
The Risk Management Association (RMA)
National Association of Commercial Finance Brokers (NACFB)
The International Factoring Association (IFA)
The Loan Syndications and Trading Association (LSTA)
The Equipment Leasing and Finance Association (ELFA)
National Association of Credit Management (NACM)
The Secured Finance Network (SFNet)
The Commercial Finance Leadership Council (CFLC)

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Common Important Terms

Loan Origination. The process of applying for and obtaining a loan. It typically involves filling out an application, providing documentation, and then getting approval from the lender.
Credit Analysis. The process of evaluating a borrower's creditworthiness, which includes reviewing credit reports, financial statements, and other documents.
Collateral. Property or other assets that are pledged as security for a loan. If the borrower defaults on the loan, the lender can seize the collateral to recoup its losses.
Underwriting. The process of evaluating a loan application to determine whether it meets the lender's criteria and if the borrower is a good credit risk.
Interest Rate. The rate at which interest is charged on a loan. It is usually expressed as a percentage of the loan amount.
Loan Servicing. The process of collecting payments from the borrower, paying taxes and insurance premiums, and ensuring that the loan terms are followed.

Frequently Asked Questions

What is a Commercial Loan Processor?

A Commercial Loan Processor is a financial professional who works with commercial lenders to process loan applications and ensure that all necessary documents and information are collected and reviewed for approval.

What are the responsibilities of a Commercial Loan Processor?

The primary responsibilities of a Commercial Loan Processor include collecting and verifying loan information, preparing loan documents, communicating with customers and other entities, and ensuring loan requirements are met.

What qualifications are required to become a Commercial Loan Processor?

To become a Commercial Loan Processor, one must typically have a high school diploma or equivalent, as well as experience in customer service, finance, or banking. Knowledge of banking regulations and procedures is also helpful.

How much does a Commercial Loan Processor typically earn?

According to PayScale, the average salary for a Commercial Loan Processor is $43,958 per year.

What type of environment does a Commercial Loan Processor work in?

Commercial Loan Processors typically work in office settings and may be employed by banks, credit unions, or other financial institutions. They may also work with lenders in the private sector.

Web Resources

Loan Processor - Expires: 2022-10-01 | Piedmont Technical College www.ptc.edu
Loan Processing | Southern Wesleyan University www.swu.edu
Private (Commercial) Loans - Financial Aid - Catholic University of ... financial-aid.catholic.edu